Older cars and franchised retailers

  03 October 2011

The publication this week of the 2011 BCA Used Car Market Report puts some hard facts on the trends felt by retailers on a day-to-day basis. The one that kept coming back though, was the age of the vehicles sold in the used car market and the age of the vehicle parc.

Older car volumes are growing due to their value in a harsh economy and also because the quality of these cars is improving too. Although you do have to remember pressure comes from the other side too, as there are fewer younger cars because of less fast-turn action by manufacturers and fleets are holding onto vehicles for longer.

The latest figures particularly show there’s been a leap in the sale of cars that are nine-years-old or more by dealers, although I’m willing to bet most of those aren’t franchised retailers.

My questions to the report’s author, Professor Peter Cooke, about this surrounded the ability of retailers to make money out of lower list price cars.

His main thoughts were that manufacturers would have to get involved more in the used car market, possibly by extending the age of vehicles allowed into an approved-used scheme. Prof Cooke also suggested that the way to make more money on used cars was to offer what was effectively a leasing package with maintenance built into a monthly fee. Effectively including a service package in with the used car price or lease rate.

It’s a neat idea, but will buyers take to it?

Tristan Young
Editorial Director

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